Gold Prices Jump on ECB Plans

NEW YORK ( TheStreet) -- Gold prices were jumping Thursday after the European Central Bank revealed the details of its bond-buying program.

Gold for December delivery was rising $10.50 to $1,704.50 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,716.90 and as low as $1,69.70 an ounce, while the spot price was gaining $9.60, according to Kitco's gold index.

ECB President Mario Draghi said that bong purchases would be sterilized and unlimited, and added that the program would extend to bonds with three-year maturities without a cap for yields.

"Buying bonds from the secondary market is akin to printing money, it is designed to place liquidity back into the market," wrote Chris Gaffney, vice president of world markets at EverBank, in a note Thursday. "As we have pointed out several times in the past, this quantitative easing is inflationary as it puts more money into the markets."

Silver prices for December delivery were gaining 32 cents to $32.65 an ounce, while the U.S. dollar index was gaining 0.21% to $81.41.

The shift above $1,700 an ounce put gold above a psychological threshold it hadn't hit in more than six months.

Gold traders were looking most of this week to Thursday's ECB announcement, as the central bank hadn't made any announcements for more than a month.

The ADP report tempered further gold gains on Thursday as it revealed better-than-expected U.S. nonfarm private job gains in August. Employment in the U.S. nonfarm private business sector rose to 201,000 during the month; consensus among economists had predicted a gain of 149,000 jobs, according to Econoday.